Seafood investment funds and companies continue to struggle to attract institutional investors, representatives of ocean-focused investment firms said during the Rethink's Blue Food Innovation Summit in London earlier this month.
The blue economy is attracting growing investor interest, and more capital is coming into the sector, but there are still not enough funds to support the sector, Ocean 14 Capital co-founder Chris Gorell-Barnes said during a panel discussion at the event, which ran May 23 - 24.
"Many companies in the sector are extremely capital intensive and would benefit from institutional investors to back the development," Aqua-Spark co-founder Amy Novogratz said, referring to AquaSpark's 2016 investment in US-based alternative feed ingredients firm Calysta.
“There is interest for the space, but we need to speed it up,” she said.
While there is an increasing number of early-stage funds looking at the sector, it is critical to get the institutional investors on board to support this $3 billion (€3.4 billion) economy,” Gorell-Barnes said.
The blue economy is expected to be worth $3 trillion (€3.4 billion) by 2030, according to the Organisation for Economic Co-operation and Development.
“We need to think about how to change the language to get the pension funds interested and to actually invest in the sector,” he said.
Christian Lim, managing director at Swen Capital Partners's Blue Ocean Fund, agrees.
“We need to continue to convey this message and to structure our vehicles to make it easier for the likes of pension funds and insurance companies to invest,” Lim said.
One way to do this, argued Novogratz, is to clearly communicate about the developments that have taken place across the sector during the last decade.
“Things are really starting to change, and we need to tell the story in terms of what is happening, and what is moving forward. We also need more companies to reach scale so investors clearly see the potentials,” she said.
Many sector-focused investment firms are still working on their first fund, and the trigger point for the institutional investors to invest will be once the next fund is raised.
“For us, the trigger point will be our next fund, as institutional investors will not take the risks during the first fund. The computer simply says it’s too risky.”
Now, however, is already a good time to invest in seafood and the ocean, the panelists said.
“The big banks are spinning out papers on blue economy, so it is happening and there is a bit of a blue rush going on. But it is not happening fast enough,” Gorell-Barnes said.